<Provisional translation>
October 25, 2016

For Immediate Release
REIT Issuer
Hankyu REIT, Inc. (Securities Code: 8977)
19-19 Chaya-machi, Kita-ku, Osaka
Yoshiaki Shiraki, Executive Director
Asset Management Company
Hankyu REIT Asset Management, Inc.
Yoshiaki Shiraki, President & Representative Director
Contact:
Hiroshi Yoshida
General Manager, IR and Public Relations Department
Email: hankyureit-ir@hankyu-rt.jp

Notice Concerning Acquisition of Domestic Real Estate
Hankyu REIT, Inc. (hereafter “Hankyu REIT”) hereby notifies Hankyu REIT Asset Management, Inc., the asset
management company that Hankyu REIT has selected to manage its assets (hereafter the “Asset Management
Company”), today decided to make the following acquisition of asset.

Details1.

Overview of Acquisition(1) Asset to be acquired:

Right of ownership(2) Property name:(Tentative name) OASIS Town Itami Konoike (site)(3) Proposed acquisition price:

7,100,000,000 yen(excluding acquisition-related expenses, property tax, city planning tax
and consumption tax, among others)(4) Appraisal value:

7,100,000,000 yen (Date of appraisal: October 25, 2016)(5) Proposed acquisition date:November 25, 2016(6) Seller:

Domestic corporation (Please refer to “5. Overview of Seller” below) (Note)(7) Acquisition fund:New borrowings described in “Notice Concerning Debt Financing”
separately announced today and cash on hand

(Note) The name of the seller is not disclosed as the consent of the seller was not obtained

2.

Reason for Acquisition
Hankyu REIT will acquire a site of a community-based retail facility (hereafter the “Property”) utilizing theAsset Management Company’s own network, in order to attain steady growth, based on the target andpolicy of asset management stipulated in its Articles of Incorporation.
Acquisition of the Property utilizes part of proceeds from the transfer conducted on April 8, 2016 with theintention to enhance the stability of the portfolio by adding a community-based retail facility in the Kansai
region following KOHYO Onohara Store acquired on July 1, 2016.
Since the yield after depreciation (based on appraisal value) of the Property is 4.3% (Note) surpassing the
average yield after depreciation of the portfolio at the end of the 22nd fiscal period (3.5%), Hankyu REIT

1

believes it should contribute to enhancement of the profitability of the portfolio as well as expansion of its
asset scale.
(Note) The figure is calculated based on the operating revenues and operating costs in the second year with anassumption of 100% rent collection, using the DCF method described in the appraisal report.

[Status of Portfolio]
End of 21stfiscal period

Transfer(end ofproperty

November(Note 3)End of 22nd
fiscal period(end of May
2016)

Already-acquired
property(Note 4)

The Property

Afteracquisition(Note 5)(Note 6)2015)
Number of
23 properties

2 properties

21 properties

1 property

1 property

1,631
million yen

7,100
million yen

23 properties

properties(Planned)
5,430
million yen

transfer/acquisition
price
Asset scale
Average NOI yield(Note 1)

Average yield after
depreciation

139,307
million yen

132,897
million yen

141,628
million yen

4.8%

3.8%

4.8%

5.3%

4.3%

4.9%

3.4%

0.6%

3.5%

4.4%

4.3%

3.6%

8,479
million yen-587
million yen

12,633
million yen-34
million yen-301
million yen

12,297
million yen(Note 1)

Unrealized income/loss (Note 2)

Note 1: Average NOI yield is calculated by dividing the sum total of (a) the difference between the real estate lease
operation income and real estate lease operation expenses and (b) depreciation, by total acquisition price. Average
yield after depreciation is calculated by dividing the sum total of difference between the real estate lease operation
income and real estate lease operation expenses, by total acquisition price. Average NOI yield and Average yield
after depreciation are based on the actual figures for the 20th and 21st fiscal periods for End of 21st fiscal period
and Transfer property; the actual figures for the 21st and 22nd fiscal periods for End of 22nd fiscal period; thefigures stated in the appraisal reports for Already-acquired property and The Property; and figures by adding thefigures in the appraisal reports of Already-acquired Property and the Property to the actual figures of existing
properties for the 21st and 22nd fiscal periods for After acquisition.
Note 2: Unrealized income/loss indicates the difference between the appraisal value and the book value. The figure forTransfer property indicates a figure at the end of the 21st fiscal period; for Already-acquired property and theProperty, a figure calculated based on the book value (expected value) which is the total of the proposed acquisition
price and acquisition expenses that is to be recorded as asset pursuant to the accounting policy of Hankyu REIT;
and for After acquisition a figure obtained by adding/subtracting unrealized income/loss of Already-acquired
property and the Property to/from unrealized income/loss at the end of the 22nd fiscal period.
Note 3: “Transfer property” refers to Namba-Hanshin Building and Richmond Hotel Hamamatsu that were transferred on
April 8, 2016. For the details of Transfer property, please refer to “Notice Concerning Transfer of Domestic Real
Estate Trust Beneficiary Interests (Namba-Hanshin Building and Richmond Hotel Hamamatsu)” dated March 10,2016.
Note 4: ”Already-acquired property” refers to KOHYO Onohara Store that was acquired on July 1, 2016. For the details of
Already-acquired property, please refer to “Notice Concerning Acquisition of Domestic Real Estate” dated June 24,
2016.
Note 5: The lessee of the Property is constructing a building on the Property as of the date of this press release, and therent through to the date preceding the opening date of the store of the lessee or September 2, 2017, whichever
earlier, will be 25%. The real estate lease operation income and real estate lease operation expenses of the2Property are calculated based on the operating revenues and operating costs in the second year assumed under
100% rent collection,using the DCF method described in the appraisal report, and thus differ from the real estatelease operation income and real estate lease operation expenses assumed under the rent through to the datepreceding the opening of the store of the lessee or September 2, 2017, whichever earlier.
Note 6: The figures for After acquisition are figures considering only asset acquisition of Already-acquired property and theProperty since the end of the 22nd fiscal period and may differ from actual figures.

Itami City where the Property stands is located between Osaka and Kobe in the southeast of Hyogo
Prefecture, and Osaka International Airport (Itami Airport) is located on the border with Toyonaka City and
Ikeda City, Osaka Prefecture. Itami City is located in the area dominated by the Hankyu Hanshin HoldingsGroup, bounded by Hankyu Kobe Line, Takarazuka Line and Imazu Line. Since it is close to the centers ofOsaka City and Kobe City with excellent access, it is popular as a commuter town as well.
The Property is located in an area where there are many detached houses and apartments. Many company
housing and dormitories are scattered about in the vicinity and many families are also living in the area.
Population by trade area based on the Basic Resident Registers in 2015 is approximately 28,000 within
1km, approximately 100,000 within 2km and approximately 236,000 within 3km, forming an excellent tradearea.
The Property is located on the intersection of Prefectural Route 335 Nakano-Nakasuji Route and Municipal
Road Konoike-Ogino Route (both 2-laned road on the side), enjoying ample traffic volume and goodvisibility. Although the main transportation will be cars or buses, above mentioned trade area population byrequired time from the Property when using cars is approximately 58,000 within 5 minutes, approximately
254,000 within 10 minutes and approximately 599,000 within 15 minutes, enjoying abundant population.
The Property is a community-based retail facility comprised of a food supermarket, apparel stores and drug
stores, etc. HANKYU OASIS, the main tenant, is a food supermarket brand operated by HANKYU OASISCo., Ltd., a consolidated subsidiary of H2O Retailing Corporation, which is another group company ofHankyu Hanshin Toho Group just like Hankyu Hanshin Holdings, Inc., Hankyu REIT’s sponsor. It has 83
stores (as of July 2016) in the Kansai region with its original style of “high quality store specializing in food”
under three concepts of “specialty,” “live aspect” and “information communication.” They work todifferentiate themselves from other supermarket chains in the Kansai region by installing a “kitchen stage”
in the spacious store to introduce new products and menus as well as by making the stores attractive withcreative ideas such as setting up a face-to-face fresh fish section and selling vegetables by weight.
3.

Details of Asset to be Acquired
Property name(Tentative name) OASIS Town Itami Konoike (site)

Specified asset type

Right of ownership

Proposed acquisition price

7,100,000,000 yen

Appraisal value

7,100,000,000 yen (Date of appraisal: October 25, 2016)(Appraisal organization: Daiwa Real Estate Appraisal Co., Ltd.)

Location Address

4-183 Konoike, Itami-shi, Hyogo and otherLand

Building coverage

Building

60%

Floor area ratio

200%

Zone use

Quasi-industrial district

Month/Year
built
Structure/
Floors
Use

3

―
―
―

Site area
Form ofownership

17,997.10m

Total floor

2

areaForm ofRight of ownershipownership――

Property manager

HankyuHanshin Building Management Co., Ltd. (planned)

CollateralYes (to be released upon acquisition)
・Hankyu REIT plans to own the land only.
・The lessee of the Property is constructing a building on the Property as of the date

Other matters to noteof this press release, and the rent through to the date preceding the opening dateof the store of the lessee or September 2, 2017, whichever earlier, will be 25% of
the rent on and after the date following the date indicated above. (The rent on
and after the date following the date indicated above will be the full amount.)

4. Overview of Leasing
Total number of tenants

1

Principal tenant

HANKYU OASIS Co., Ltd.

Annual rentNot disclosed (Note 1)

Leasable area

17,997.10m (Note 2)

Leased area

17,997.10m (Note 2)

Occupancy rate

100% (Note 3)

Security deposits

Not disclosed (Note 1)

2
2

Note 1: The Asset Management Company decided not to disclose these items as no consent has been obtained from thetenants for the disclosure of annual rent, etc., and there is a possibility that the disclosure of Annual rent andSecurity deposits may affect competitiveness of Hankyu REIT and eventually damage the interests ofunitholders.
Note 2: The areas specified in the lease agreement as of today are indicated.
Note 3: The ratio of leased area to leasable area.

5. Overview of Seller
The name, etc., are not disclosed as consent has not been obtained from the seller, which is a domestic
corporation. Please note that there are no capital, personnel or business relationships to be specially noted
between Hankyu REIT or the Asset Management Company and the Seller. In addition, the seller does not fallunder the definition of “related party.”

6. Status of Property Acquirers, etc.
Details are omitted as the acquisition of the Property is not acquisition from parties with special interests ofHankyu REIT or the Asset Management Company.
7. Transactions with Interested Parties, etc.
HankyuHanshin Building Management Co., Ltd., to which the property management operations for theProperty are planned to be consigned, falls under the definition of “interested party, etc.” in the Investment
Trusts Act. Accordingly, the property management agreement has been deliberated and approved by theinvestment management committee, the compliance committee and the board of directors meeting of theAsset Management Company in accordance with the Asset Management Company’s rules concerning

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transactions involving conflicts of interest set forth in the management guidelines, investment management
committee regulations and compliance committee regulations, etc.
8. Overview of Intermediaries
Name

Sumitomo Mitsui Trust Bank, Limited

Location

1-4-1 Marunouchi, Chiyoda-ku, Tokyo

Title and name of

Kunitaro Kitamura, Chairman

representative

Hitoshi Tsunekage, President

Business activities

Trust services, banking business, other currently engaged businesses such as realestate brokerage and transfer agency, and registered financial institution duties

Capital342,000 million yen (as of March 31, 2016)

Date of establishment

July 28, 1925

Relationship between Hankyu REIT or the Asset Management Company and the Company
Capital relationships
Personnel
relationships
Business

There are no capital relationships to be stated between Hankyu REIT or the AssetManagement Company and the Company.
There are no personnel relationships to be stated between Hankyu REIT or the AssetManagement Company and the Company.
The Company is a trustee of several properties owned by Hankyu REIT. In addition,

relationships

Hankyu REIT has made borrowings from the Company.

Applicability as

The Company does not fall under the definition of “related party” of Hankyu REIT or

related party, etc.

the Asset Management Company.

Brokerage fees

Not disclosed (Note)(Note) Brokerage fee is not disclosed as consent has not been obtained from the intermediary.

9. Settlement Method, etc.
Hankyu REIT plans to pay the sellers an amount equivalent to 10% of the proposed acquisition price uponconclusion of the agreement and the remaining amount by deducting the said deposit from the acquisition
price, etc., on the proposed acquisition date.
10. Acquisition Schedule
October 25, 2016

Resolution of acquisition of the Property at the Asset Management Company’sboard of directors meeting

October 27, 2016

Conclusion of agreement (proposed)

November 25, 2016

Payment and acquisition of the Property (proposed)

11. Future Outlook
Since the impact of the acquisition of the Property on the conditions surrounding the management ofHankyu REIT’s assets for the fiscal period ending November 2016 (23rd fiscal period: June 1, 2016 toNovember 30, 2016) announced in the “Financial Results for the 22nd Fiscal Period Ended May 2016” isexpected to be minimal, there is no revision to the forecasts.
•

The Japanese original document was distributed to press clubs within the Tokyo Stock Exchange (Kabuto Club), Osaka Securities
Exchange, and the Ministry of Land, Infrastructure, Transport and Tourism, and to the press club of the construction trade
newspaper of the Ministry of Land, Infrastructure, Transport and Tourism.

5•Hankyu REIT website: http://www.hankyu-reit.jp/eng/<Attached Materials>
・Reference Material 1

Overview of Appraisal Report

・Reference Material 2

Table of Real Estate Portfolio After Acquisition

・Reference Material 3

External Appearance Image, Floor Image, Property Photograph and Surrounding
Area, and Map of Location

6

・Reference Material 1<Overview of Appraisal Report>
Property name(Tentative name) OASIS Town Itami Konoike (site)

Appraisal value

7,100,000,000 yen

Appraisalorganization

Daiwa Real Estate Appraisal Co., Ltd.

Date of appraisal

October 25, 2016
Item

Value

Basis for valuation

Value indicated by the income approach(direct capitalization method over a definite term)

7,100,000,000 yen

Value using the direct capitalization method

7,150,000,000 yen(1) Net operating income (NOI)

307,414,728 yen
1,361,032 yen(2) Operating profit on deposit and security(3) Capital expenditures(4) Net cash flow (NCF = (1) + (2) − (3))

Assessment taking into consideration the investment
management yield both from the management andprocurement perspectives

0 yen
308,775,760 yen(5) Discount rate

4.2%

Assessment taking into consideration the investment
yield, risks as an investment target, etc., with discountrates of similar transaction cases as references

Value using the discounted cash flow (DCF)
method7,080,000,000 yen

Discount rate (analysis period and recovery
price)

4.1%

Assessment taking into consideration the investment
yield, risks as an investment target, etc., with discountrates of similar transaction cases as references

Discount rate (end of analysis period)

4.3%

Assessment taking into consideration the investment
yield, risks as an investment target, etc., with discountrates of similar transaction cases as references

Special items toconsider at thetime of making
adjustments toprovisional
calculations anddeciding theappraisal value

The appraisal decision was based on an assessment of the value indicated by the income approach using both thedirect capitalization method and DCF method at 7,100,000,000 yen and the Appraisal value was decided with thevalue.

The appraisal value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time of theappraisal conducted by the real estate appraiser in accordance with the Act on Real Estate Appraisal, Real Property Appraisal Standards,
etc. There are cases where another appraisal of the same real estate may result in a different appraisal value, depending on the real estateappraiser conducting the appraisal and the method or timing of the appraisal. Furthermore, the appraisal of real estate is neither aguarantee nor an obligation, now or into the future, of a sale or purchase at that appraisal value.

7

・Reference Material 2
Table of Real Estate Portfolio after Asset Acquisition
Property
Code(Note)

Property Name

Facility(Type of
Use)

RegionAcquisition Date

AcquisitionPrice(millions ofyen)

Investment
Ratio

HEP Five
R1 (K)(14% of the quasi co-ownership of thetrust beneficiary interests)

RetailKansaiFebruary 1, 2005

6,468

4.6%

R2 (K)

Kitano Hankyu Building

RetailKansaiFebruary 1, 2005

7,740

5.5%

R3 (K)Dew Hankyu Yamada

RetailKansaiFebruary 1, 2005

6,930

4.9%

R4 (K)

Takatsuki-Josai Shopping Center

RetailKansaiNovember 15, 2005

8,600

6.1%

R5 (K)

Nitori Ibaraki-Kita Store (site)

RetailKansaiMarch 29, 2006

1,318

0.9%

RetailOther

October 2, 2006

2,170

April 9, 2007

5

Hotel Gracery Tamachi

RetailOther

December 25, 2008

4,160

2.9%

R9 (K)

LaLaport KOSHIEN (site)
HANKYU NISHINOMIYA GARDENSRetailKansaiJanuary 22, 2009

7,350

5.2%

R11 (K)(28% of the quasi co-ownership of thetrust beneficiary interests)

RetailKansai

April 16, 2013

18,300

12.9%

RetailKansaiJune 27, 2013

8,100

5.7%

RetailKansaiJune 27, 2013

1,870

1.3%

RetailKansaiJune 4, 2014

3,100

2.2%

Kohnan Hiroshima Nakano-Higashi

R6

Store (site)

R8

R12 (K)R13 (K)R14 (K)

AEON MALL SAKAIKITAHANADA(site)
MANDAI Toyonaka Honan Store(site)DAILY QANAT Izumiya Horikawa
Marutamachi Store (site)

1.5%

R15 (K)

kotocross Hankyu Kawaramachi

RetailKansaiJune 4, 2014

2,770

2.0%

R16 (K)

LIFE Shimoyamate Store (site)

RetailKansaiJune 4, 2014

1,421

1.0%

R17 (K)

MANDAI Gojo Nishikoji Store (site)

RetailKansaiJune 24, 2014

4,182

3.0%

R18 (K)

KOHYO Onohara Store

RetailKansaiJuly 1, 2016

1,631

1.2%

RetailKansaiNovember 25, 2016

7,100

5.0%

93,21565.8%

R19 (K)(Tentative name) OASIS Town Itami
Konoike (site)
Subtotal

O1

Shiodome East Side Building

O2 (K)

Hankyu Corporation
Head Office Building

OfficeOther

February 29, 2008

19,025

13.4%

OfficeKansai

April 10, 2013

10,2007.2%

29,225

20.6%

Subtotal
M1 (K)M2
M3 (K)
M5

Ueroku F Building
Sphere Tower Tennozu

ComplexKansaiNovember 1, 2005

2,980

2.1%

(33% of the quasi co-ownership of thetrust beneficiary interests)

Complex

Other

October 2, 2007

9,405

6.6%

LAXA Osaka

ComplexKansaiJanuary 22, 2009

5,122

3.6%

Kita-Aoyama San cho-me Building

Complex

Other

November 12, 2013

1,680

1.2%

Subtotal

19,187

13.5%

Total

141,628100.0%

Note: The properties owned by Hankyu REIT are assigned codes and numbers classified by facility (type of use) and region.
The alphabets on the left represent the facility (type of use): (“R” is for retail-use facility, “O” is for office-use facility and“M” is for mixed-use (complex) facility.) The numbers are assigned to each facility in the chronological order of theacquisition. Also, the letter “(K)” in parentheses to the right of the numerals indicates that the property is located in the
Kansai region.

8

・Reference Material 3<External Appearance Image><Floor Image>

Itami-Konoike
Itami
Konoike(Note) Hankyu REIT plans to acquire only the land. Also, since the building is currently under construction, these image
views may differ from the actual conditions after completion.

9

<Property Photograph>（Tentative name） ＯＡＳＩＳ Ｔｏｗｎ Itami Konoike （site）<Map>(Tentative name) OASIS Town
Itami Konoike (site)(Tentative name) OASIS
Town Itami Konoike (site)10